Economic Doom Boom Update
Business 2.0 reports on the coming job boom and the return of the labor shortage: Forget those grim unemployment numbers. Demographic forces are about to put a squeeze on the labor supply that will make it feel like 1999 all over again. And the Wall Street Journal says: Investors are starting to pour money into technology start-ups again, spurred by innovative ideas and the stock-market uptick.

More from the WSJ story:

Ideas for start-ups are bubbling, and infusions into early-stage companies were up 43% in the second quarter over the previous quarter, according to a survey released this month by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association. "The summer slowdown that used to take place hasn't happened this year," says Magdalena Yesil, a general partner at U.S. Venture Partners. ... The second-quarter survey indicates that total venture investments, including both early-stage and more-established companies, rose, albeit slightly, to $4.3 billion from $4 billion in the first quarter.

Among the reasons: After three years of tight budgets, corporations are eyeing new technology, particularly products that can buoy in-house research and development or guarantee a rapid payback in cost-savings. Entrepreneurs, some of them victims of corporate layoffs, have had time to formulate more pragmatic ideas that fit the changed environment. "Unemployment is definitely the mother of invention," says Michael Feinstein, a partner with Atlas Venture. Other factors include better odds of a financial payoff for investors, shown by the stock market's rise and the successful public offerings of a few technology companies. So far, only 24 companies have made their public debut this year, but more venture-backed start-ups are in the going-public queue.

Among the tech sectors that appear to be heating up: companies developing ways to battle junk email, a/k/a/ "spam," wireless-networking technologies, biotechnology, energy and medical-device start-ups.

Mayfield's Mr. Morgan likens the environment to the aftermath of a forest fire: "If you look up, you only see scarred pines, devastation and you miss the point. If you look down, there's a profusion of damned near everything growing out of the ground."